Trade suppliers, kitchen manufacturers and kitchen industry professionals could be claiming tens of thousands back in R&D tax relief, according to Mark Joyner, director of Research & Development Specialists Ltd (RDS), but he believes many aren’t taking advantage of the scheme. Here he reveals if it’s right for your business.
“If I were to say to you, I’ll give you £53,000 for your business tomorrow, I’m sure there would be lots of things that, as a business owner, you could do with that money. That figure represents the average amount of a successful claim through the HMRC R&D Tax Incentive. It’s no scam, or a way to play the system, yet for many reasons, companies that are eligible are not claiming the money to which they are entitled.
“We know that those in the kitchen industry are constantly inventing and creating bespoke solutions for clients, and that is exactly what this incentive has been created for. For the clients we do have in this sector, we consistently see high value claims, but we know there are many more companies that could benefit.
“Research and development (R&D) tax credits are a valuable Government incentive that rewards UK businesses for investing in innovation. It's a powerful source of funding for businesses looking to grow and develop new products, services, procedures, and internal systems.
“There is a misconception that to qualify for R&D tax relief then a business must employ people in lab coats and be undertaking scientific research, but that is not the case. Any type of research and development could qualify.
Some examples within the kitchen industry could include:
* Optimising the manufacture and assembly process of furniture (doors / cabinets / drawer boxes) by adopting or developing new production processes.
* Developing an all-new piece of furniture that provides a unique solution to a requirement and which presents something new to the market.
* Developing green furniture product ranges and lines using new sustainable materials and methods of production.
* Developing or adapting an existing furniture range and manufacturing process to increase both sustainability and efficiency.
* Integrating bespoke software, into CNC machinery or similar, that will increase efficiency and productivity.
* Developing a new / unique, online trade ordering system to support a showroom dealer network.
* Developing unique, online marketing tools with new integrated software / technology, that will further benefit and support a showroom dealer network.
* Developing new processes, within the factory / shop-floor environment, that greatly assists with health and safety or quality control (or both).
“Any UK limited business can claim. There are no restrictions on the type or size of business although there are different types of R&D scheme depending on whether you fit HMRC’s guide as being an SME or large company.
“For the SME scheme, a company must employ less than 500 people and have a turnover of less than £85m or a balance sheet total of less than £73m. An SME’s eligible R&D costs receive an additional 130% deduction when calculating the taxable profit. Eligibility is focussed on the research project rather than the type of business. Typically, an R&D claim can be submitted for a business’s current and previous financial year.
“R&D Tax Credits are not PPI for businesses. It is a legitimate Government-backed incentive to encourage innovation and has been operating in the UK since 2000. A lot of people think it sounds too good to be true – some are time poor and don’t have the time to investigate the scheme properly and some are just unaware that it even exists. At RDS we simplify the process and take a lot of the leg work away from busy accountants, senior teams or business owners.”
To find out more and get in touch with RDS, email pmd@randdspecialists.co.uk.
